N. Korea tensions rattle stock markets

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       Swiss stocks were among those under pressure in Wednesday’s trade

Shutterstock Swiss stocks were among those under pressure in Wednesday’s trade

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a sell-off, and the tensions have proved the trigger.

The dollar skidded to an eight-week low against the yen as escalating tensions between the United States and North Korea triggered yet more investor flight to safety.

"Of course it's all come at a time when share markets are due for a correction, so North Korea has provided a flawless trigger", he added.

The dollar edged up about 0.1 percent to 110.16 yen, up from Wednesday's low of 109.56 yen, which was the dollar's lowest level since June 15.

In other energy futures trading, wholesale gasoline was little changed at $1.62 a gallon, heating oil rose 2 cents to $1.65 a gallon and natural gas rose 6 cents to $2.88 per 1,000 cubic feet.

Gold was up $3 at $1293 an ounce, adding to 2-month highs. Tokyo's Nikkei 225 share index closed down 1.3% at its lowest since June 1 as the strong yen hit exporters, while South Korea's KOSPI index fell 1.1% to seven-week lows.

Pyongyang said it was examining plans for attacking Guam, a US territory in the Pacific with a military base.

"Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.

North Korea had responded to Mr Trump's previous promise to unleash "fire and fury", with a threat to land a missile near the US Pacific territory of Guam.

"The market had been complacent for a while regarding headlines from North Korea".

Weakness in U.S. Treasury yields may also be supporting the yen, Sweeting said.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, rose almost 11 percent to break above 12.

The New Zealand dollar jumped to above $0.7370 after the release of the monetary policy statement.

The yen has also registered its biggest weekly gain since May against the dollar amid speculation that investors of Japan, as the biggest creditor nation, would repatriate their funds should a war break out.

But "the yen may be expected to lose its safe haven status if U.S".

The Korea Gold Exchange, a local trader, said the average daily sales of 100-gram gold bars reached 250 units since Wednesday, rising sharply from 50 units on average.

For now, the dollar remained on the back foot, pulling back 0.1 percent to 0.9635 Swiss francs on Friday, after dropping as much as 1.2 percent to a two-week low overnight.

The focus on North Korea largely overshadowed a Labor Department report showing an unexpected drop in USA producer prices in the month of July.

Bond prices, which move inversely to yields, closed higher.

Investors welcomed new data showing USA inflation at the consumer level inched higher last month, suggesting that the Federal Reserve may be less likely to raise interest rates next month.

As of 5:00 p.m. EST on Tuesday, gold was sitting at $1,260.90 per ounce; the yellow metal soared to a seven-week high midway through last week.